New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1887-07-02
4 RONDHOLDERS POLICY.

The explanations on behalf of Secretary
Fairchid which are made from Washington
begin to grow interesting. They imply mat
the prepayment of interest on bonds VIII be
rsorted 10, from time to time. as means Oh
relieving temporary needs OF the market.
T. the NATURAL argument that the Secretary
RS really no business to be nursing wall
S seet and its spcculations and shifting tho
policy Of the Treasury to meet such wants the
f,fcnds of the Secretary reply that under ex-
is ing lava the Treasury is constantly inter-
fering in the market in spite Of itself. by ac-
cumula.ion CT an unused surplus. and that it is
but Justice to modify the effects Of that inter-
ference as far as possible. 1t seems " DC
appreciated by the Secretary that prepayment
of interest will be found an insufficient re-
source. though he seems hardly to realize how
insufficient. In any time Of real activity. the
pressure for more money is likely TO absorb
very quickly all that the Secretary can put out
bv that process, and without diminishing In
the least the intensity of the demand. More
over. the money so paid out fails to reach.
in the main. the sort of people whose needs
constitute pressure in the money Market In
the Wall Street sense.
As to the purchase of bonds. it is argued that
the Government can thus save something In
the end. because the bonds can be bought Tor
less than their face and the aggregate OF IN
terest to be paid on them If they run TO ma
turity. But in answer the Secretary is assured
that this is true only in case the Government
NAV be expected, for the next twenty years. 10
collect a large surplus revenue every year
Unless this great unused surplus is to lie Idle
for the whole period. if not employed In the
purchase of bonds, no saving can be reckoned-
The reasoning might well 60 even further
| The Secretary can save nothing for the Gov
ernmcnt by purchasing bonds. If it is practi-
cable for the Government in any way to use
its surplus revenue to better profit. As
matter of fact, there are many better ways OF
using the surplus. 1t can be used In the cd
ucation of the young, and especially In indus
trial training. 1t can be used in the foftiiica-
ton of exposed scaports. 1t can be used In
the improvement OF important harbors. 1t can
be used in providing greater facilities Tor tho
foreign mail service. and in thus encouraging
American commerce. In either OF these ways.
and In score of other ways. the entire surplus
revenue for any year might be employed, with
a certainty of far greater return than can In
any event be realized by the purchase OF bonds
not yet due.
The Administration apparently begins to
realize that either Of the methods 1t has under
consideration will help bondholders rather Than
the public Primarily, the money put out by
either of these methods docs not go directly
into industrial or commercial channels. There
is no certainty that any definite part oil 1t VIII
be applied to industrial or commercial uses.
The whole of it does go to class OF persons
who have been living On their investments. OF
accommodating money by means Of investment
including with the latter class the institu-
tions by which money is invested in United
States bonds The persons and institutions
which habiiually use money In this fashion.
and in no other. are quite likely to employ any
sum received from the Treasury In other ways
than in tn, building up Of new industries. or
In the relief of stringent money market
The truth is that popular hostility 10 meas
urcs for the relief or convenience Of the bond
holding class has in this case some Justifcauon.
When measures proposed were demanded by
strict regard for the public faith, opposition
to those measures was justly censurable as
evidence of a regulating spirit. But In this
case good faith does not require the purchase
of bonds twenty years before they fall due.
u does not require the prepayment OF interest
on bonds. The political objection to such
measures, which the Administration will have
90 meet IL it decides to resort to them. is here
sustained by conviction that the measures
in themselves are calculated to promote the
interest OF small class, and not of the public.